Head of Ukraine PM's party says new coalition agreed

KIEV (Reuters) - Ukrainian Prime Minister Arseny Yatseniuk's party has agreed with President Petro Poroshenko's faction and the Fatherland party - all former coalition partners - to form a new alliance, the head of Yatseniuk's People's Front party, said on Monday.

The deal could spell the end of months of political infighting and corruption allegations that have stymied reforms demanded by Kiev's Western backers and derailed negotiations for a new $1.7 billion loan from the International Monetary Fund needed to prop up the war-torn economy.

"Tomorrow at 1200 (1000 GMT) we will go to a general meeting of the coalition," People's Front Maksym Burbak said after a meeting of deputies with Poroshenko and Yatseniuk late on Monday.

Representatives of Poroshenko's faction and former Prime Minster Yulia Tymoshenko's Fatherland party have not yet commented on the results of the meeting.

Support for Yatseniuk has tumbled since he took power after the 2013/2014 Maidan protests, but he has refused to step down until a new coalition agreement is signed.

Parliamentary Speaker Volodymyr Groysman, a 38-year-old former mayor and ally of Poroshenko, has been put forward as a replacement prime minister. The formation of a coalition would improve his chances of receiving parliamentary support for his nomination.

Two former coalition allies - the populist Radical party and the reformist Self-Help party - have refused to rejoin the alliance.